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Capella is rising -- and profitable -- star in online learning

Shaun Jamison just received his PhD in education from Capella University. In the four years it took -- attending classes, talking with professors, writing his dissertation -- he never set foot on campus. In fact, there is no campus. Jamison toiled away in a virtual ivory tower. Capella offers only online classes.

Jamison, 40, chose Capella because he worried a traditional graduate school would be unmanageable.

Compares favorablyMPR Photo/Art Hughes

"You're away from the family, and the home and the job. It just takes up too much of the time with a set schedule," he said."

Jamison is only a 20-minute drive from the state's flagship University of Minnesota, where tuition is close to $4,000 a year less. But the St. Louis Park resident is established in a career and has a family. And that was the profile Steve Shank had in mind when he founded Capella almost 15 years ago.

"It was my assessment that traditional modes of learning were not really that respectful of adult learning. It didn't work that well," according to Shank."

Shank was an executive with Tonka Toys for 12 years. He started Capella, to take advantage of the growing demand for educational opportunities for adults.

Capella's enrollment has soared from about 3,700 students in 2001 to almost 20,000 today.

Growth sector in educationMPR Photo/Art Hughes

Investors like what they see. Capella's share price has risen more than 70 percent since the company went public last November.

But pressures to make a profit troubled one former Capella employee. Christopher Tassava found the company pressured employees to keep the students paying. Capella admits nearly everyone who applies. Tassava, now working at Carleton College, often worried Capella's customers didn't fully understand what they were getting into financially.

"With Capella the impetus is always to keep the student making progress," Tassava said. "Often there wasn't a lot of progress discernible. Making progress often reduced to 'are you paying tuition or not? Are you taking out student loans?'"

Capella officials dispute that, saying they provide extensive counseling for students to help them succeed both in school and after they graduate.

Students need safeguardsMPR Photo/Art Hughes

Capella alum Shaun Jamison says more timely service was one of Capella's advantages, but he acknowledges the institution has some disadvantages as well.

Capella must swim against a current of academic skepticism about learning without class time and any institution trying to make a profit from education.

Jamison also recognizes the stigma over his alma mater may limit his career in academia.

"I'll probably be working at either an online school or for-profit or a traditional university, but not Ivy League or something like that. So I know where I'm at with that," Jamison said.

Why would someone like Shaun Jamison pay more and get a degree that may be worth less than a traditional university's?

"That's the $64-billion question," said Kevin Kinser, associate professor of higher education studies at the State University of New York at Albany. He's also writing a book about for-profit institutions.

"It's hard to know why a particular student would choose to pay more for a degree at one institution than they can get exact same degree at another institution. Some of it has to do with convenience, perhaps," according to Kinser.

Capella officials say convenience is key because many students don't want to pay for parking or day care and submit to a standard class schedule.

But an improving image for online higher education may be helping as well. An annual survey by the Sloan Consortium found almost two thirds of academic leaders in 11 Midwestern states rated online learning outcomes the same or better than traditional settings. Both the University of Minnesota and the Minnesota State Colleges and Universities System are increasing their online courses.

"As online becomes more mainstream it's good for us because it's promoting the paradigm shift that's so important to us," said Capella CEO Shank. As that paradigm shifts, he believes Capella's market will only grow.